The city of Atlanta was recently hit by a ransomware attack by a savvy gang of hackers – they only want somewhere in the neighborhood of $40,000 – $50,000, which is more than doable for a big city. Paul Rosenzweig and Megan Reiss on Lawfare explore two of the lessons:
Second, this episode is a prime example of a situation where what is good for the city is at odds with what is good for the federal and state governments.
Knowing it could lose a significant amount of data if the ransom is not paid, the city of Atlanta is facing a serious burden. Six bitcoins, while expensive, is almost certainly far less than the costs and man-hours that went in to the creation of the data that could be lost and will need to be recreated as a result of the freeze. If we were advising Atlanta as a client, our advice would be simple: “Pay the ransom.”
However, the federal government will almost certainly see things differently.
And you can guess why – paying the ransom will simply encourage the criminal behavior. A prime example of scoping, and why the Federal government isn’t a business.
Third, this episode should serve as a cautionary note on the unfettered growth of cryptocurrency. Cryptocurrency can have malignant uses that seem to overwhelm—in both volume and effect—the benign purposes to which it can be put. The Atlanta attack is yet another example of a situation that would be nearly impossible to replicate in a world where no cryptocurrency existed. In the long run, the attack provides another data point in the ongoing effort to determine whether and how cryptocurrency should be regulated.
This would be a radical form of value transfer.
Yet, crime occurred prior to the advent of cryptocurrency. While not wishing to step on the authorss venerable toes, I have to wonder if the many ways to conceal and handle stolen money are not roughly equivalent to this particular scheme. I’m also somewhat baffled by their assertion that this scheme wouldn’t work without cryptocurrency. There are many ways to transfer value, which money is just one representation, from one entity to another – I have to wonder if it’s worthwhile to get hung up on the method of payment.
